With a swing of the pendulum, global electronics giant Siemens is putting front office at the sharp end of its business.
If Nicholas Carr had made his "IT doesn't matter" claim two or three years ago, he would have had the firm support of Jan Dressel, who was until very recently Siemens's vice president and CIO for the Asia-Pacific region. Back then, Dressel was convinced that ultimately, doing IT was just a matter of bringing best of breed software together, integrating it, and making it work in ways that give you the maximum possible competitive advantage within your industry.
Now Dressel, who on November 1 became the VP and CIO of Siemens Corporation (the US arm of Siemens AG), has a rather different take.
"The reason for that is I feel that it is too complex," he says. "The integration - the getting the components to work with each other and whatnot in a very seamless environment - is a task that is very, very complex and a very, very costly proposition. As a matter of fact, you spend a ton of money buying software and then you spend two, three, four times or even more than what you spent to purchase the software to get it all to work together."
Dressel says even if the market eventually evolves to a point where a few major players are delivering better product, integrated with the highest level of functionality and involving far less complexity, all that means is that CIOs will spend less time trying to stitch components together and more on the front end of the business. In fact, as Siemens strives to move itself from a product-oriented company to one concentrating on services, that is exactly what the company's almost 200 CIOs are being freed to do, not because the market has reached that glorious point, but because Siemens has found one key to freeing most of its CIOs from the tyranny of the back office.
Like their contemporaries in other organisations, Siemens's country-level CIOs traditionally expended most of their time and energy on infrastructure, technology and back-office (read ERP) issues and activities. But now the Siemens global business pendulum has swung sharply away from the back office as standardisation, consolidation and centralisation become the company's watchwords. As Siemens pushes as far as it can towards a "black box" approach to technology within the current limitations on software, as more and more of its systems are moved to central hubs, and as responsibility for infrastructure is taken away from them, CIOs in Siemens offices across the world have been freed to escalate dramatically their devotion to the front end.
Dressel says from the start of the exercise two or three years ago Siemens has insisted all of its CIOs must engage on three major playing fields at once: the infrastructure, where the work of cost reduction, consolidation and streamlining never goes away; the applications; and - increasingly - the end business processes, which are derived from the continually changing strategy of the company. At the country level, those moves towards standardisation, consolidation and centralisation have been comprehensively transforming the lives of Siemens Australia CIO Heiner Karst and his many contemporaries and may provide a pointer to the future lot of many CIOs, or at least those in multinational organisations.
"CIOs typically spend a lot of time concentrating on the ERP and the software spaces, but now we are able to focus on the sharp end of the business," Karst says. "With large parts of our IT and applications infrastructure hosted and managed offshore, local IT value-add lies in business process support and optimisation, as well as project managing corporate or local productivity or technology improvement initiatives."
In what Karst calls "an exciting new chapter in Siemens' IT lifecycle", consolidation and standardisation have given its CIOs the luxury of being able to dramatically escalate their attention on areas like business development, relationship management, sales environments and business processes. Moreover, it is transforming regional CIOs' relationships with one another and changing their role as CIOs as well.
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